Willis Exec Warns of Rise in ‘White Collar Crime’ in UK

Francis Kean, executive director in Willis’s financial and executive risks practice has examined a growing trend in white-collar crime in a WillisWire blog. He indicated that” according to a report in TheTimes on Thursday 22nd May 2014, the number of senior prosecutors recruited by U.S. law firms in London has moved into double figures in the last three years.”

He also noted that there “is no shortage of demand for the unique experience and perspective former prosecutors can provide to clients facing the full weight of a Serious Fraud Office (SFO) or Financial Conduct Authority (FCA) investigation.”

There have also been a considerable rise in the number of investigations and prosecutions in the tax sector. Kean wrote that the “number of people being investigated by HM Revenue & Customs (HMRC) has doubled in one year. Figures disclosed under the Freedom of Information Act show HMRC made inquiries about the tax affairs of 237,215 people in 2013, compared with about 119,000 in 2011/12.

“Another aspect of this growth in investigations, about which I have blogged in the past, is the potential for conflicts of interest arising between companies and their exécutives,” he continued. This growth in potential conflicts is likely to lead to an increased demand for multiple legal representation.”

The upshot from the increases in investigations “might not be good news for D&O insurers who are asked to pick up the bill,” Keane wrote. On the other hand, it’s probably “welcome news for lawyers specializing in white-collar crime.”

The Times article, written by Steven Parkinson, head of criminal and regulatory litigation group of law firm Kingsley Napley, also focused on these potential conflicts of interest. He is quoted as saying: “at some point in the life of a criminal investigation of a company, individuals need representation either because directors or former directors are suspects or because the SFO or the FCA want to interview individuals under compulsion as witnesses. Then there is a potential conflict between the company and the individual.”

Keane also indicated that with the “advent of the Bribery Act and a number of prosecutions thought to be in the SFO’s pipeline and no sign of any diminished appetite by the U.S. Department of Justice for bringing Foreign Corrupt Practices Act prosecutions, this trend towards battle readiness among UK law firms is likely to accelerate.”